Locating distressed properties

This is just a collection of quotes from other authors about various ways to locate distressed properties. Pretty much all of the info is a repost.


For those wondering how to find distressed properties other than driving around, there are multiple methods to searching online. However, it should be noted that distressed properties come in many forms, and are not always called “distressed” outright. Look for ‘distressed properties for sale by owner’ that are delinquent in taxes and mortgage payments, properties that must be sold legally due to bankruptcy or divorce, probate deals, and properties that are owned by the banks or the government.

Starting with the first example, finding properties with tax delinquencies is luckily a straightforward process. The hardest part will be finding your local tax assessor’s web page that lists these properties. After you have found the site, simply search the listings until you have found a property you’re interested in. Another type of property that might be in distressed is one for which the owners have been delinquent on their mortgage payments, also known as “underwater.” These properties are usually in “pre-foreclosure,” and can be found on multiple listing sites such as your local county website or paid sites such as Foreclosure.com.

Properties that must be sold legally, such as through bankruptcy or divorce, may also be in distress. When looking through your county foreclosure listings, you may have already noticed listings that are listed as being auctioned for bankruptcy or divorce. Although not every county is required to list such properties, you can at least find properties that are up for auction. The probate court is yet another creative space to find distressed properties. A probate property is one that was owned by someone who has passed, but without leaving the property to anyone in their will. It should be noted that making an offer on a probate sale requires a special process, as the property is being sold through an attorney or an executor. Finally, investors should search through REO (real estate-owned) and government-owned properties that have already been foreclosed upon. When a property owner fails to make mortgage payments, the provider of the mortgage loan (in this case the bank or the government) retains the rights to reclaim the property. Many local and national banks have their own property listing sites, as do government entities such as Freddie Mac and Fannie Mae.

Other suggestions from the same article:

Driving For Dollars
If you’re wondering where to find distressed properties, there is a traditional method that transcends time: hopping in the car and driving around. Assuming you already have a target neighborhood in mind, simply drive around and look for properties that stand out from others due to a state of neglect. Telltale signs to look out for include an overgrown yard, broken windows and shutters, exterior paint that is faded or peeling, notices that are posted on windows and doors, and junk mail and newspapers that are left uncollected. If you find a property that meets any or all of these descriptions, be sure to write down the address so you can start investigating.

Expanding on some of those suggestions, here is the article from BiggerPockets by Drew Sygit  called “6 Ways to Locate Distressed Properties Online

Finding properties with delinquent taxes is fairly straightforward if you can find the local tax assessor’s website. Depending on where you’re looking, you might need to Google for “[City Name] Tax Assessor” or “[County Name] Tax Assessor”

The best “underwater” properties are the ones that are right on the verge of foreclosure — they’re the most motivated sellers. In many parts of the United States, you can find an official publication of these houses by Googling for “[County Name] Legal Notices,” but you can also find reliable, easy-to-browse listings at RealtyTrac.comForeclosure.com, and HUDForeclosed.com

Another option is to cultivate relationships with local bankruptcy and divorce attorneys, so they call you when they encounter a motivated seller.  

Real estate-owned a.k.a. bank-owned properties aren’t just “distressed”; they’ve already been foreclosed upon. Most of them are just sitting empty, slowly costing the companies that own them money. On the downside, 100 percent of them are sold as-is, so if you don’t have a good reason to be confident that a particular home is solid, they can be a gamble. The best way to find REO properties is right here on BiggerPockets: a well-maintained list of REO searches that covers the entire country.

When the HUD, FreddyMac, or FannieMae insures a mortgage and that mortgage fails, those entities foreclose on the mortgaged homes just like a bank would. And when they do, they turn around and try to sell those homes, just like a bank does. Furthermore, properties are also frequently offered by several other government entities, such as the Department for Veterans Affairs or the FDIC. While every agency has its own rules and methods, you can start your research into this vast arena at the HUD Single-Family Homes for Sale webpage, which has links to each government department’s relevant webpage. There are also several solid links on the U.S. Marshal Services’ National Sellers List [PDF].

Yet more tips from article “How to Find Distressed Properties” by Angela Colley

One way to find distressed properties is to choose a target neighborhood, then drive around and eyeball the homes there. Be on the lookout for these telltale signs:

  • Properties that stand out from other homes on the block because they are in a state of neglect
  • Properties where the lights are not turned on at night
  • Homes with yards overgrown with weeds
  • Broken windows and shutters in need of repair
  • Faded and peeling paint
  • Notices post on doors or windows
  • Uncollected newspapers and junk mail

Be Wary of Web Searches
Internet searches can yield a wealth of information about distressed properties, but there are a few risks:

  • Many sites charge a fee to browse their database. Since you’ll have to pay upfront, you won’t know if the cost was worth it until you’ve already paid.
  • Not all sites guarantee their information. What you’re looking at online may not be what you see in person.
  • Some listings are outdated. You may waste time by looking at already-sold homes.
  • If you’re browsing online, be sure to stick with a reputable free site. Try browsing realtor.com®’s Homes for Sale to get an idea of what is available in your area.

Starting real estate agent classes

And so it begins! I am making the first tangible step toward my real estate investment career. Today is day 1 of my real estate agent classes. Sat and Sun, 8 am-5.30pm. Can’t wait.

Invert, always invert

I was meditating on the quote from Charles Munger, “Invert, always invert!” I did some research to find the origins of this quote, and found some fascinating info. Here are other people’s research results, I am just reposting them

The German mathematician Carl Jacobi made a number of important contributions to different scientific fields during his career. In particular, he was known for his ability to solve hard problems by following a strategy of man muss immer umkehren or, loosely translated, “invert, always invert.” 

Jacobi believed that one of the best ways to clarify your thinking was to restate math problems in inverse form. He would write down the opposite of the problem he was trying to solve and found that the solution often came to him more easily. Read more @
https://jamesclear.com/inversion

One of the biggest musical shifts in the last several decades came from Nirvana, a band that legitimized a whole new genre of music—alternative rock—and whose Nevermind album is memorialized in the Library of Congress as one of the most “culturally, historically or aesthetically important” sound recordings of the 20th century. 

Nirvana turned the conventions of mainstream rock and pop music completely upside down. Where hair metal bands like Poison and Def Leppard spent millions to produce and promote each record, Nirvana recorded Nevermind for $65,000. Where hair metal was flashy, Nirvana was stripped-down and raw.

This strategy works equally well for other creative pursuits like writing. Many great headlines and titles use the power of inversion to up-end common assumptions. As a personal example, two of my more popular articles, “Forget About Setting Goals” and “Motivation is Overvalued”, take common notions and turn them on their head.

Read more at
https://jamesclear.com/inversion

This article on inversion is so great, I want to make a speech about it at my Toastmasters club

RE agents income – articles

I am considering my options for going into real estate full time next year. Part of my income will (hopefully) come from a couple of flips. The rest I want to make as relevant to my flips and rentals as possible. So, real estate agent for a couple of first years is a natural choice, but the financials overall need to be considered. Hopefully, the byproduct of my efforts to find good flips will be finding many properties that are not a good flip but could still be sold. I am hoping to be the first person to interact with the seller, and therefore have the opportunity to list the property. Nevertheless, I have to count on the worst-case scenario. So, here is my review

Average REA salaries in Texas by city are listed here (2019). Long story short, the average is about 41K/year for Dallas. Since I am doing this to educate myself about the buyers’ tastes, I can consider this to be paid internship. But 41K is a little low for me for a year overall, assuming that I won’t make much on my first couple of flips. But for year 1 it might work.

This article suggest starting real estate agent income as a part time income.

1 year ago

main-theme-photo

Doing our taxes I came upon our savings account statement from March 2018, showing $1,566.37 in it. It dropped from $7,162 in January 2018 to $1,566 in March 2018 due to the car payment, house payment, HOA payment, student loan payment, insurance payments, and about $2,000 worth of min payments on credit cards all going out each month. March was the last month we had money for, and then we would have to start cashing out our retirement accounts.

Now, exactly 1 year later, we are in much better shape. I am grateful to the universe, my spiritual teachers, Osho and Thich Nhat Hanh, and to the power of my Life Pyramid for getting through those difficult times in 2018.

Reviewing “The Dhandho Investor”

Reviewing “The Dhandho Investor: The Low-Risk Value Method to High Returns” by Mohnish Pabrai

This is the best book on investment principles I have read so far (but I only read 2 or 3, so…). It is closely aligned with value investing principles of Graham and Buffett, but takes a slightly different approach. It uses several formulas and ideas (for example, Buffett’s idea of the “moat,” Kelly’s formula, the Magic Formula, arbitrage,) and throws in some fascinating thoughts on an ancient military battle formation called
chakravyuh (one of the deadliest formations a general can encounter) and the ways to break through it, and ties this all together into a neat little story to describe the main tenants of his “philosophy.” The main among them is this one: “Heads, I win; tails, I don’t lose much.”

With this approach in mind, Mohnish goes on to examine stories of outstanding success, often by immigrants (Papa Patel, Manilal Chaudhari, himself) who came in the United States with nothing but a solid dhandho (work) philosophy, which transformed into an investment philosophy, which transformed into the above average successes.

There are a ton of examples and mathematical formulas that Mohnish uses to demonstrate the basics of the value investing (or Dhandho style investing). I made so many highlights in the book it is not even funny. Most importantly, his ideas are focused on ordinary, poor, underprivileged individuals who make it all the way through the chakravyuh and come out victorious, all presented in an angaging story-telling style, so they really stay in your head as vivid images long after the book is finished. The main differentiator between this and other books I have read is that this book describes a philosophy first and strategy and techniques second. I hated to put the book down, it was too short!

Reposting: 45 creative real estate marketing ideas (from FitSmallBusiness)

This is a truly outstanding list of marketing ideas that could apply to almost any business, although in this case these are ideas for marketing a listing of a property

Stolen from https://fitsmallbusiness.com/real-estate-marketing-ideas/

Market Yourself Using Zillow

This is the most obvious one, obviosuly

Offer Home Valuations to Capture Seller Leads

This is a good one. Many people want to know what their property is worth, and you are offering this service to them for free, and you make it automated, so it won’t suck you into time-consuming projects. So a win-win.

Create Subdivision Website Pages

I am not sure about this one, looks like alot of work, especially if you have to market several subdivisions

Write a Killer Real Estate Newsletter

This one is also alot of work, and only a tiny section of your mailing list will see it, so I am not 100% sure ROI will be as good as on some other initiatives

Employ Google AdWords

This one is another one that I am not sure how it really pays off. So many other people are using the same adwords. I never found adwords to be all that useful in my previous marketing attempts.

Master Your Elevator Pitch

This one seems to be pretty obvious. A 30-sec value statement should be the must on the landing page at the minimum

Host Local Neighborhood Tours

I am not sure about this one, sounds like alot of trouble, and alot of the tour (like traffic congestion, weird things happening, etc) are outside of your control during the tour. But it might be worth trying a time or two.

Livestream Your Agency’s Day to Day

Kind of like a reality show. I am not sure who would have the time to watch an agency day-to-day, most people who are working probably have better things to watch. But it might be worth a month try.

Use Decor to Set Your Listing Apart

The decor has a funky item that is easy to remember even after many houses have been visited. Serves as a memory tool for the buyers.


Optimize Your Facebook Page

Ok, sure. It is almost like saying “Optimize your web page.” Good idea that most people would probably ruin with a bad execution

Use SEO to Drive Traffic to Your Website

Ok, another bland idea, but a good reminder about the basics


Highlight Homes With Professional Photography

People think in pictures, and feel in pictures, and dream in pictures. So yeah, this one should be the basics, I think.

Send Postcards That Are ‘Fridge-worthy’

This is an excellent suggestion about the types of topics to cover in your mass mailing. Make the ad of the company a tiny thing at the bottom, but a big important thing in the body. Do it regularly enough, and they will start looking forward to those postcards, I think

Use Instagram Stories

That is a topic of a whole different discussion, but sure, let’s not forget to get to strategize on this.

Choose Words That Sell

Yes, emotions eat logic for breakfast. Get emotional juices flowing, but how? Another interesting topics of research.

Use Strategic PR to Stay Relevant & Build Authority

They suggest using Help a Reporter Out (RARO) web site. I would need to see a more detailed strategy for that one, as it might be time-consuming and has too wide of an audience

Become a Lifetime Learner

Duh. But it is a good reminder to check out new classes from your local RE associations

Showcase Your Charitable Side

A good idea, I thought about the ways to do it myself, but I think it is such a long-term project that a good base of other cash-generating ideas is needed to execute that one consistently year in and year out. People forget quickly.

Create a Blog That Answers Client Questions

All blogs are pretty time consuming, and are lost in the noise quickly unless they provide serious valie. So, this might be a good add-on, but not the main vehicle.

Elevate Your Listing Photos With BoxBrownie.com

Seems more like a plug-in for a vendor than a real suggestion, but sure. The more images and the different-er and richer the images, the better. I have a feeling there are a ton of other sites that can help with the virtual staging process.

Stand Out With Handwritten Notes

Sure, if your buyers can read your handwriting.

Learn the Best Ways to Engage on Social Media

How is this not a repetition of like 5 previous suggestions? C’mon, FitSmallBusiness! Stop feeding us gruel.

Grow Your Network With Regular Events

Again, good old basics (happy hours), but probably could be worth refreshing on. Do them only if you have a budget and the attendees are pre-qualified. Otherwise – networking not necessarily converts to sales.

Create a Client Testimonial Packet

Probably a good suggestion, with some work, one-time effort can pay off

Make a Personal Connection With Video Emails

I would give it a shot just to see what the engagement is really like, but I would not hold high hopes for that one. How many videos of yours will they want to see? Everyone is busy.

Think Outside the Box

Oh, I LOOOOOOVE this one. Just check it out:

real estate marketing - Tips from the pros

Bring the Open House to Clients

A good idea, if your clients are tech-savvy enough to utilize this technique to the fullest, or to know what an iPad is. I would think of a different prize if I was the realtor. Something all ages and OS-fans could find attractive.

Harness the Power of Cold Calling

Really? Really? This is the ground-breaking thought of the day?

Create Viral Infographics to Share on Social Media

Goes hand-n-hand with the “fridge worthy” suggestion. But – lots of work and research and paying someone for design, for a subliminal message that may or may not hit the target when they ARE ready to buy or sell. This is not an immediate conversion type of idea, so do it only if you have the time and budget to make long term moves like that.

Maximize Lead Generation With Landing Pages

Uh, ok. Sure. If you have a web site at all, I recommend just a good web designer. Let him or her tell you more good tips like that.

Use Retargeting Campaigns to Drive Traffic Back to Your Site

Seems like a full-time web designer will be needed, unless you want to spend your time generating web pages and tracking moves.

Choose the Right Farm Area

I am not 100% sure I understood this advice at all, so I am not going to comment.

Utilize Snapchat for Real Estate Marketing

Ok, ok. Can we just make a separate post for all social media strategies and keep everything together in THAT post?

Learn How to Market to Millennials

Good idea, I am sure there is a lot of literature on that online

Start a Direct-to-Door Marketing Campaign With Door Hangers

I would give that one a shot for a quarter or two to see if this leads to real results

Learn Facebook Messenger Marketing

Grrr. More ways to stock poor prospects everywhere they go. A good way to become annoying I think

Invest in Your Community to Generate Strong, Top-of-Mind Referrals

Community events, charity events – I already commented on this. Those are a long term strategy. People forget so quickly. I would go for more immediate and direct approaches first.

Make a Viral Real Estate Video

Making ANYTHING viral is an art and a science in its own. I would not count on any one of your videos becoming truly viral. Plus, viral videos are by definition not targeted. It might be viral, but is it seen by people in my geographics are who are currently looking for THAT type of house?

Set Up Local Community Pages

I would need to see that executed in practice to buy that this is a good investment of time, but ok, anything could be good to try out

Craft a Personalized Message for Your Buyers

Sure, why not. This is more of a small technique rather than a strategy, and hopefully not the only technique in his toolbelt.

Create a New & Eye-catching Logo

I think a logo won’t do much difference if you have no TRAFFIC to your side. Logo is not going to make or break the sale. It might be just a tiny, tiny, tiny grain than tips the scales in your favor.

Create a Video Series to Share With Leads

That is actually a good one, provided that your audience is tech savvy to view them. But it is a time consuming and not targeted, much like the viral video suggestion

Optimize Your Listing Photos

I thought it was already covered by like, 5 other suggestions?

Make Your Website Your Storefront

Jesus Christ, is this the Ground Hog Day? I thought we have been through this already? Get yourself a web designer who knows what to do for modern viewership

Leverage Influencer & Community Marketing

This is actually another good one. Just a few quotes


…..reach out to local bloggers and Instagram influencers — whose followership matches your target buyer — and have them create related content and share it with their followers. 

Also, you can partner with a business in the community to host an event at [a property you’re selling] to gain publicity and get foot traffic. For example, if the space is great for showcasing art, you can partner with a local gallery to host a “gallery night” in the property and invite anyone you can to the property.

Obviously, this is something that requires a ton of planning and collaborations, so it will come with its own costs. But worth a try.

HOW TO GET A TEXAS REAL ESTATE LICENSE

I am starting to look for info on getting the RE agent license. Here is the rundown:

To earn your real estate license in Texas, you must be 18 years of age, complete 180 hours of approved education, obtain a sponsoring broker, submit required fees and forms to Texas Real Estate Commission, submit to fingerprinting, and pass the state exam. While the process to become a real estate agent is similar in most states, each state has its unique steps that must be adhered to. The seven steps to becoming a Texas real estate agent are as follows:

Requirements to Obtain Your Texas Salesperson License

Step 1: Must be at least 18 years of age.

Step 2: Register for and complete 180 hours of required education:

In order to apply for the Texas Real Estate License Exam, the state requires you to complete 180 hours of TREC-approved college-level real estate courses. Kaplan offers four education options that fulfill the 180-hour requirement.

View Licensing Packages

Step 3: Consider obtaining a sponsoring broker

In order to practice as a real estate salesperson, you must be sponsored by a licensed Texas real estate broker. You and your sponsor will both need to complete and submit the Sponsorship Form.

Step 4: Submit forms and fees to TREC

After completing the required 180 hours of licensing education, submit all education documents to TREC, including real estate school certificates.

Active or inactive initial license?

You’ll need to decide if you’d prefer an active or inactive license.

  • To apply for an active license to practice real estate, include with your initial mailing the Salesperson Sponsorship (SSF-2) form signed by a licensed Texas real estate broker.
  • To apply for an inactive license, submit only the Inactive Salesperson Application forms at this time. Submit the SSF-2 form later to activate your license.

Note: These forms can be downloaded at www.trec.texas.gov, or you may complete this process online athttps://mylicense.trec.texas.gov/datamart/mainMenuTXREC.do.

Step 5: Schedule your license examination and fingerprinting

After you receive your response letter from TREC approving you and directing you to the Candidate Information Brochure, you can schedule your exam with Pearson Vue. You will also receive direction on how to submit your fingerprints for review. You have one year from the date your application is filed to pass the examination.

Step 6: Prepare for the exam

By taking Kaplan’s world-renowned Exam Prep course, you will have no surprises on exam day. The Texas Real Estate Exam Prep program is available as a Live Class or video OnDemand Course.

Step 7: Take the state exam

Once you have passed the state exam and your fingerprints are on file, you will receive an Active or Inactive Salesperson License from TREC via email (remember to monitor your junk mail folder).


These are the TREC approved schools where I can take the necessary courses. It looks like there are 6 two-week courses in total, running $180-$220 per course, to get the right number of hours.

Online courses:

Realestateexpress.com: packages starting from $500 to $1000, originally it was a redirect from MyMetroTex web site, they have some CE info as well

RETTSchool has the in-person courses at $800 on weekends in Plano, some start in June and end in August, might be perfect for me

Dallas County Community College has pretty expensive courses, at about $200/piece, for prep courses but also for additional courses that might be useful later on

More articles from Chad Carson to read

I will read this when I am tired or bored or have to spend some time sitting and waiting for something. This is from Coach Carson, one of my favorite writers on BiggerPockets.com

Your Team: The Main Ingredient of Real Estate Stardom

Wednesday, October 19Entrepreneurship, investing, and life can become lonely roads. It’s easy to feel like we have the weight of the world on our individual shoulders.That’s why I love reminders from great teachers like hall of fame basketball coach John Wooden, who said “The main ingredient of stardom is the rest of…

Subject-to the Mortgage: A Simple & Profitable Explanation

Monday, April 14[This is part 7 of 7 in a series about creative financing] This article is about buying investment properties subject-to an existing mortgage. Because this particular strategy is a little nontraditional, I recommend watching my video to really get the concept. But first, if you want

Credit Partners – How to Do Deals With a Partner’s Credit and Cash

Monday, April 07[This is part 6 of 7 in a series about creative financing] This article is about buying properties with a credit partner. If you’re a visual learner, I sketch out the moving parts in more detail in my YouTube video. First, if you want to review my previous articles in the creative

When to Use Lease Options For Purchases

Wednesday, April 02[This is part 5 of 7 in a series about creative financing] This article is about buying properties with lease options (my YouTube video also breaks the topic down further). Some of my most profitable deals of all time have come from the combination of leases and options, so I’m excited to

How to Create a Private “IRA-Bank” For Your Deals

Tuesday, March 25[This is part 4 of 7 in a series about creative financing] This article is about my most-used creative financing tool: self-directed IRA loans. If you want to review my three previous articles about creative financing, check them out here: 6 Reasons I Prefer Creative Financing to Bank

How Seller Financing Really Works

Sunday, March 16[This is part 3 of 7 in a series about creative financing] My last two articles have introduced the concept of creative financing: 6 Reasons I Prefer Creative Financing to Bank Financing My Creative Financing Toolbox (And Why You Need It Too). In this article and short video

More Options or More Money? My Personal Struggle.

Wednesday, March 12In Oliver Stone’s iconic movie, Wall Street, Charlie Sheen plays a young hotshot in the stock market. At one point he confides to his girlfriend a personal dream. “I think if I can make a bundle of cash before I’m thirty and get out of this racket

My Creative Financing Toolbox (And Why You Need It Too)

Monday, March 10[This is part 2 of 7 in a series of articles about creative real estate financing.] In my last article, I gave 6 Reasons I Prefer Creative Financing to Bank Financing. Bank financing isn’t bad, of course. There are many times when it’s very appropriate. My main problem with

6 Reasons I Prefer Creative Financing to Bank Financing

Monday, March 03[This is part 1 of 7 in a series of articles about creative real estate financing. Each installment will include an article and a short, 10-15 minute YouTube video] I graduated from Clemson University in 2002. Soon after graduating I began real estate investing full-time with a busines

How to Win Game #2 – Create Passive Cash Flow

Thursday, February 27In my last two articles I shared that we are all playing two financial games and I shared How to Win Game #1: Cash Now (Survival). In this article I will share a two-part real estate game plan to win Game #2 – creating passive cash flow. First, a definition. My idea of

How to Win Financial Game #1 – Cash Now (Survival)

Thursday, February 27In my last article I shared that we are all playing two financial games. For review, the two games as I see them are: Game #1 – Cash Now: The game of active income and of survival. Success is earning more than you spend. Game #2 – Cash Flow: The game of passive income and of freedom

The Two Financial Games You Play (and How to Win)

Sunday, February 23Whenever I think about the big picture of real estate investing, I like to remember a very important reality before getting into the nuts and bolts. The reality is this: We are trying to win two different financial games. Just like basketball and baseball, these two financial games have

How to Get What You REALLY Want: The 3 Currencies of Life

Monday, February 10[Part 1 of an ongoing series about my big picture wealth and real estate game-plan] “[I]n spite of the fact that America is famous for its unhappy rich people, most of us remain convinced that just a little more money will set life right. In this way, the messianic metaphor of modern

My Sprint up the Real Estate Mountain

Monday, February 03Out of the Starting Blocks: When I first started my real estate investing business, I studied a few different successful investors whose business models really intrigued me. These investors were buying, fixing up, and selling 50 houses per year! The investors were also averaging $20,000

My “Go or No Go System”: How I Decide to Do a Deal (or Not)

Wednesday, January 29Real estate investors seem to gravitate to one of two extremes when it comes to doing deals: Analysis paralysis: frozen in fear of making a mistake Emotional exuberance: being too aggressive, too optimistic, and irrational. I am not exempt. I have visited both of those places from time

10 Lethal Mistakes to Avoid on Your First Real Estate Investment

Your first investment will be a learning process. While you’ll definitely make a few mistakes along the way, there are a few common pitfalls that can be avoided if you educate yourself beforehand.

REI – conclusions for today

Rumi quotes

After spending literally whole day on BiggerPockets.com I came to two solid conclusions:

  1. Buy and hold may be a questionable strategy for me at this time because I do not have the cash reserves yet to put up for downpayments and all that good stuff, and the rental income alone may not be able to give me enough of a margin to save for the new downpayment
  2. To build the cash reserves, flipping properties seems to be the most common path, and the one I have most advice on. I will spend the first 2-3 years of my REI career becoming a good flipper that does not need a constant hand-holdng, and then start using some of that cash to hold some of the units I flipped through refinancing after the flip.

After reading Chad’s article on quitting the 9-5 and starting a 24/7, I think that I will use the next year to get my real estate license, find brokers who could use my skills, start connecting with people who will become my team mates, do “go alongs” with real estate agents, brokers, flippers.

I will use Chad’s plan and proceed with all his prep steps while my husband and I pay off our debt from credit cards, which will take 14-16 months in itself to happen. But at least now I have a very detailed plan from Chad, and whenever I have a plan, I can execute.

Today was meant to be. It was meant that I would find Chad’s article, and all the reading I have done for 9 hours before-hand allowed me to narrow down my choices to his suggested path.

How to quit your job and invest in real estate – by Chad Carson (Coach Carson)

Two absolutely astonishingly informative articles published on BiggerPokets

This is just a small excerpt of his extensive Article #1

Here are my initial sources of education:

Here is his article #2 about building the team, starting to review listings, and trying to make offers


Here is Chad’s blog on DeeperPockets: https://www.biggerpockets.com/blogs/4712-chad-carsons-blog

REI books to read

The Book on Estimating Rehab Costs

How much does it really cost to renovate your investment property?

Learn detailed tips, tricks, and tactics to accurately budget nearly any house flipping project and investment property renovation from expert real estate investor and fix-and-flipper J Scott. Discover the tried-and-tested steps of his professional framework and methodology for precisely evaluating renovation costs in hundreds of his own successful rehab projects. Determine how to accurately estimate all the costs you are likely to face during renovation—and get all of your rehab questions answered in a single place!

Whether you are preparing to walk through your very first rehab project or you’re an experienced home flipper, this handbook will be your guide to identifying renovation projects, creating a scope of work, and staying on budget to ensure a timely profit! You don’t need to be a contractor to flip houses, but you do need to know the fundamentals of budgeting and pricing your renovation—including everything from cosmetic renovations to complex installations and upgrades. This book gives you the estimation tools needed to produce the income you desire on your first—or next—investment deal! 

Money People Deal: The Fastest Way To Real Estate Wealth By Stefan Aarnio

The Five Million Dollar Book is a guide to raising capital and putting together real estate joint ventures. This book was a tool used by the author to raise over five million dollars of cash to build his fortune in real estate

REI articles

On finding opportunities

On finding the first deal properties: https://www.biggerpockets.com/renewsblog/new-investor-simplified-first-deal-guide/

Evaluating opportunities

The 8 most important evaluation formulas to understand and memorize: https://www.biggerpockets.com/renewsblog/2016/01/13/top-8-real-estate-calculations/

Multi-family investments for 1st timers: https://www.biggerpockets.com/renewsblog/multifamily-first-investment/

On putting the margin of safety into every deal: https://www.biggerpockets.com/renewsblog/the-surest-way-to-destroy-your-real-estate-investing-career/

Miltifamily market seems to be cooling off – strategies for this period: https://www.biggerpockets.com/renewsblog/multifamily-market-cooling/

Possible upcoming multi-family crash may resemble the subprime crisis. Very interesting graphs on market cycle analysis: https://www.biggerpockets.com/blogs/6082/79792-how-the-multifamily-market-may-crash-like-the-subprime-crisis

More advice on how not to overpay for miltifamily: https://www.biggerpockets.com/renewsblog/stop-overpaying-for-multifamily/

On saying “no” to wrong opportunities

The guide to due diligence: https://www.biggerpockets.com/renewsblog/due-diligence-ultimate-guide/

https://www.biggerpockets.com/renewsblog/dead-lady-succeed-real-estate/

Interesting step-by-step due-diligence walk-through for an apartment building: https://www.biggerpockets.com/renewsblog/doing-due-diligence-example-apartment-complex/

Biggest discoveries during due diligence: https://www.biggerpockets.com/forums/311/topics/669931-what-have-been-your-biggest-discoveries-during-due-diligence


“Sometimes it’s the deals you don’t do that make you rich!” JD Martin

Common mistakes in REI

6 common mistakes new investors make: https://www.biggerpockets.com/renewsblog/2015/10/19/6-common-mistakes-investors/

On investments in self-storage

https://www.biggerpockets.com/renewsblog/high-demand-continues-self-storage/

On various negotiating tactics

Make deals fearlessly: https://www.biggerpockets.com/renewsblog/2014/11/26/real-estate-negotiating-101-make-deal-fearlessly/

Investment strategies

Buy and hold vs flip and go – https://www.biggerpockets.com/renewsblog/2014/10/21/buy-and-hold-real-estate-is-the-ultimate-investment-heres-why/

How to start as a hustler, even some 1st-year hustle suggestions: https://www.biggerpockets.com/renewsblog/2014/11/19/hustle-the-single-most-important-factor-to-finding-real-estate-deals/

Calculating how many rental properties I need to retire: https://www.coachcarson.com/how-many-rental-properties-to-retire/

The Shiny Strategy Syndrome: https://www.biggerpockets.com/renewsblog/2016/02/28/shiny-strategy-syndrome/

 

On your investment philosophy

On how to set your investment philosophy by establishing clear goals: https://www.biggerpockets.com/renewsblog/new-investor-simplified-first-deal-guide/

Adopting the screw it, let’s do it attitude for newbies – https://www.biggerpockets.com/renewsblog/screw-it-lets-do-it/

Focusing on Why before focusing on What and How- https://www.biggerpockets.com/renewsblog/2016/06/08/real-estate-investors-learn-apple/

Buffet-ology applied to REI: https://www.biggerpockets.com/renewsblog/2014/10/15/how-to-use-a-margin-of-safety-to-avoid-financial-disaster-the-buffett-series/

A little bit more of Buffet-ology thinking: https://www.biggerpockets.com/renewsblog/ignore-principle-youll-destroy-real-estate-career/

I guess, sometimes you do not mind overpaying for a multi-family property? An interesting discussion here: https://www.biggerpockets.com/renewsblog/why-are-so-many-overpaying-multifamily/

Current RE market conditions

Study showing that currently US is not in a bubble situation overall, although some cities are an exception: https://www.biggerpockets.com/renewsblog/2015/07/16/housing-bubble-7-us-markets/

Strategies to succeed in the cooling market: https://www.biggerpockets.com/renewsblog/succeed-in-a-cooling-market/

How to recognize signs of the housing bubble, and what to do to make money during the bubble: https://www.biggerpockets.com/renewsblog/2015/11/18/invest-property-fear-bubble/

Pivoting to real estate

In 2019, I am pivoting to real estate. I do not know how soon I will be able to start investing myself, but at the very least I can start learning and looking for friends within that industry.

I am starting a new category of links that will deal with this topic

The next chapter

I am starting to think what the next chapter of my life would look like. Today is the first day I am officially organizing my thoughts and ideas. Whatever happens to me in the next 10 years starts today.

It is 5 am, can’t wait for the dawn to come.

David Ogilvy – philosophy and quotes

David Ogilvy Quotes

I got interested in learning more about David Ogilvy. I found this article to be pretty informative: https://postcron.com/en/blog/david-ogilvy-7-commandments-advertising-marketers-need-know/

"Tell the truth, but make the truth fascinating."
David Ogilvy

They summarize Ogilvyan method in 7 commandments

Commandment #1: Your role is to sell, don’t let anything distract you from the sole purpose of advertising.

Commandment #2: Clearly define your positioning: What and for Who?

“I could have positioned Dove as a detergent bar for men with dirty hands, but chose instead to position it as a toilet bar for women with dry skin. This is still working 25 years later.”

Commandment #3: Do your homework. Study your consumer in detail.

“Advertisers who ignore research are as dangerous as generals who ignore the signs of the enemy.“

Commandment #4: Think of the consumer as a woman, she wants all the information you can give her.

Commandment #5: Talk to them in the language they use every day, the language in which they think.

Commandment #6: Write great headlines and you’ll have successfully invested 80% of your money.

“On the average, five times as many people read the headline as read the body copy. When you have written your headline, you have spent eighty cents out of your dollar.”

“Never use tricky or irrelevant headlines… People read too fast to figure out what you are trying to say.”

Commandment #7: Highlight the product by making it the hero.

“I never assign a product to a writer unless I know that he is personally interested in it. Every time I have written a bad campaign, it has been because the product did not interest me.”

Example: Apple’s positioning strategy focuses primarily on emotions and the consumer’s lifestyle, their imagination, passion, dreams, hopes, aspirations, and they promise to make people’s lives easier. When you buy an Apple product, you immediately become part of a generation that believes that the rebels can change the world and have got to fight for what they think.

My own addition to the commandments

Commandment #8: Start with THE BIG IDEA

“It takes a big idea to attract the attention of the consumers and get them to buy your product. Unless your advertising contains a big idea, it will pass like a ship in the night. I doubt if more than one campaign in a hundred contains a big idea”

Quotes by David Ogily:

What you say in advertising is more important than how you say it.

The best ideas come as jokes. Make your thinking as funny as possible.

Don’t bunt. Aim out of the ball park. Aim for the company of immortals.

The consumer isn’t a moron. She is your wife.

In the modern world of business, it is useless to be a creative, original thinker unless you can also sell what you create.

A good advertisement is one which sells the product without drawing attention to itself.

Never write an advertisement which you wouldn’t want your family to read. You wouldn’t tell lies to your own wife. Don’t tell them to mine.

Our business is infested with idiots who try to impress by using pretentious jargon.

Develop your eccentricities while you are young. That way, when you get old, people won’t think you’re going gaga.

I do not regard advertising as entertainment or an art form, but as a medium of information

When I write an advertisement, I don’t want you to tell me that you find it ‘creative.’ I want you to find it so interesting that you buy the product.

Books by David Ogilvy:

Ogilvy on Advertising

Confessions of an Advertising Man

AoW: Ch. 13 – The use of spies

Sun Tzu quotes

I am continuing with my interpretation of the book. Everything in italic is a direct quote from the book.

2. Hostile armies may face each other for years, striving for the victory which is decided in a single day. This being so, to remain in ignorance of the enemy’s condition simply because one grudges the outlay of a hundred ounces of silver in honours and emoluments, is the height of inhumanity. 3. One who acts thus is no leader of men, no present help to his sovereign, no master of victory. 4. Thus, what enables the wise sovereign and the good general to strike and conquer, and achieve things beyond the reach of ordinary men, is foreknowledge. 5. Now this foreknowledge cannot be elicited from spirits; it cannot be obtained inductively from experience, nor by any deductive calculation. 6. Knowledge of the enemy’s dispositions can only be obtained from other men. 7. Hence the use of spies, of whom there are five classes: (1) Local spies; (2) inward spies; (3) converted spies; (4) doomed spies; (5) surviving spies.

What allows the wise strategist to secure victory beyond that of an ordinary leader is the ability to find ways to obtain foreknowledge of the opponent’s plans and intentions. This foreknowledge cannot be obtained through intuition, experience, or calculation. It can be deduced by through logic. Knowledge of someone’s plans can be obtained only from someone with direct information about them. Therefore one of the most important part of understanding of your opponent’s conditions is the use of informants. There are 5 types of informants: 1) locals; 2) integrated informants; 3) flipped informants; 4) “misdirected” informants; 5) skilled informants

8. When these five kinds of spy are all at work, none can discover the secret system. This is called “divine manipulation of the threads”. It is the sovereign’s most precious faculty. 9. Having local spies means employing the services of the inhabitants of a district. 10. Having inward spies, making use of officials of the enemy. 11. Having converted spies, getting hold of the enemy’s spies and using them for our own purposes. 12. Having doomed spies, doing certain things openly for purposes of deception, and allowing our own spies to know of them and report them to the enemy. 13. Surviving spies, finally, are those who bring back news from the enemy’s camp.

If you can manage to use all five types of informants at once, no one will be able to understand your method of obtaining information. This is called “pulling on invisible strings,” and it is one of the most important jobs of the strategist.

  • Locals means someone who lives, works, or goes to the same places as your opponent
  • Integrated informants are those who are a part of the management or leadership of the opposing company
  • Flipped informants are those who initially were controlled by your opponent, but are now under your control
  • Misdirected informants are those whom you give false or misleading information that they can relay to your opponent, misdirecting his attention or actions as a result
  • Skilled informants are those that managed to get a hold of valuable and timely information and bring it back to you.

14. Hence it is that with none in the whole army are more intimate relations to be maintained than with spies. None should be more liberally rewarded. In no other business should greater secrecy be preserved. 15. Spies cannot be usefully employed without a certain intuitive sagacity. 16. They cannot be properly managed without benevolence and straightforwardness. 17. Without subtle ingenuity of mind, one cannot make certain of the truth of their reports. 18. Be subtle! be subtle! and use your spies for every kind of business. 19. If a secret piece of news is divulged by a spy before the time is ripe, he must be put to death together with the man to whom the secret was told.

20. Whether the object be to crush an army, to storm a city, or to assassinate an individual, it is always necessary to begin by finding out the names of the attendants, the aides-de-camp, the door-keepers and sentries of the general in command. Our spies must be commissioned to ascertain these. 21. The enemy’s spies who have come to spy on us must be sought out, tempted with bribes, led away and comfortably housed. Thus they will become converted spies and available for our service. 22. It is through the information brought by the converted spy that we are able to acquire and employ local and inward spies. 23. It is owing to his information, again, that we can cause the doomed spy to carry false tidings to the enemy. 24. Lastly, it is by his information that the surviving spy can be used on appointed occasions.

The strategist is recommended to have closer relationship with informants than with anyone else, reward them more liberally than anyone else, and deal with them more secretly than with anyone else. They need to be managed with compassion and frankness, but with great caution. Doubt everything they say and verify it. Delicacy is the main approach.

Use informants in every aspect of the business. And be very aware of the possibility of informants being within your organization, as well. Whether trying to take over a territory, break up alliances, or to maneuver against an individual, always start with finding out who are the closest people to that person, whom do they work with, play with, who has access to information about them and their plans? First, find that info from skilled informants. If the informants from the opposing organization become known, be kind to them and tempt them to serve you, instead. If they agree, give them a generous reward. That is how they become flipped informants. Through the information provided by flipped informants you can identify local informants and integrated informants, give more research assignments to the skilled informants, as well as craft the misdirection campaign that would be carried to the opponent by the misdirected informants.

25. The end and aim of spying in all its five varieties is knowledge of the enemy; and this knowledge can only be derived, in the first instance, from the converted spy. Hence it is essential that the converted spy be treated with the utmost liberality. 26. Of old, the rise of the Yin dynasty was due to I Chih who had served under the Hsia. Likewise, the rise of the Chou dynasty was due to Lü Ya who had served under the Yin. 27. Hence it is only the enlightened ruler and the wise general who will use the highest intelligence of the army for purposes of spying, and thereby they achieve great results. Spies are a most important element in war, because on them depends an army’s ability to move

The main goal of the opponent is to obtained detailed knowledge of the opponent. This knowledge can only be obtained through a flipped informant, therefore, flipped informants need to be treated most generously. Informants are the most important element in the strategy. The ability to make successful decisions about moving or staying should be coming from the information they provide.

AoW: Ch.12- Attack by fire

Sun Tzu quotes

I  am continuing with my interpretation of the book. Everything in italic is a direct quote from the book.

16. Hence the saying: The enlightened ruler lays his plans well ahead; the good general cultivates his resources. 17. Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical. 18. No ruler should put troops into the field merely to gratify his own spleen; no general should fight a battle simply out of pique. 19. If it is to your advantage, make a forward move; if not, stay where you are. 20. Anger may in time change to gladness; vexation may be succeeded by content. 21. But a kingdom that has once been destroyed can never come again into being; nor can the dead ever be brought back to life. 22. Hence the enlightened ruler is heedful, and the good general full of caution. This is the way to keep a country at peace and an army intact.

A clear-headed leader plans well ahead and gathers resources. Do not move unless there is a strong advantage to be gained. Do not put your team into danger unless there is something significant they can bring back from the confrontation. Do not enter into a confrontation unless the position you are gaining or defending is critical to the plan.  Never put your teams or allies in a difficult situation because of personal pride or grievances. Ask yourself whether there is an advantage to the forward move. If there is no clear advantage, stay where you are. Your moods and grievances may pass, but a destroyed territory cannot be brought back, and lost teams and allies cannot be easily replenished. A clear-headed leader is prudent, attentive, and cautious. His priority is to keep his current position safe and his resources intact.